Wall Street hits new highs in strongest week since August

Wall Street hits new highs in strongest week since August

Channel NewsAsia - Business·506 views·2020-01-18 05:11

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 9, 2020. REUTERS/Brendan McDermid

REUTERS: Wall Street climbed to record highs on Friday, with major indexes turning in their strongest weekly gains since August, after strong U.S. housing data and signs of resilience in the Chinese economy raised hopes of a rebound in global growth.

Market sentiment brightened further this week after the United States and China sealed a Phase 1 trade deal, pausing an 18-month tariff dispute that has weighed on financial markets globally.

Earlier in the day, data showed China ended 2019 on a somewhat firmer note, even as economic growth cooled to its weakest in nearly 30 years.

Meanwhile, U.S. homebuilding surged to a 13-year high in December, suggesting the housing market recovery was back on track amid low mortgage rates.

"The macro data points both here and abroad have been relatively positive," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

"That is creating an increased sense of optimism going into not just the earnings, but also guidance which is far more important at this point for both Q1 and fiscal 2020."

Analysts expect earnings at S&P 500 companies to drop 0.8per cent in the fourth quarter, but forecast a 5.8per cent rise in the first quarter of 2020, according to Refinitiv IBES data.

Many investors expect companies to be more upbeat about the future following the truce in the China-U.S. trade war.

"We think the most important thing this earnings season will be what CEOs say about their outlooks," said Scott Ladner, chief investment officer at Horizon Investments in Charlotte. "That always matters, but we think that because of the speed at which some of these global uncertainties have been resolved, it's unlikely we will see those things coming through in the numbers."

Billionaire David Tepper, who founded hedge fund Appaloosa Management, told CNBC that he remains bullish on U.S. equities.

"We have been long and continue that way," he said.

All three main indexes closed at record highs.

The Dow Jones Industrial Average rose 0.17per cent to end at 29,348.1 points, while the S&P 500 gained 0.39per cent to 3,329.62.

The Nasdaq Composite added 0.34per cent to 9,388.94.

For the week, the S&P 500 added 1.96per cent, the Dow rose 1.82per cent and the Nasdaq increased 2.29per cent.

In a thin day for earnings, oilfield service provider Schlumberger NV reported a slightly better-than-expected quarterly profit, but its stock dipped 1.1per cent.

Google-parent Alphabet Inc rose 2.0per cent, extending gains after it became the fourth U.S. company to top a market value of US$1 trillion on Thursday.

Technology majors including Visa Inc , Apple Inc and Qualcomm Inc provided among the top boosts to the S&P 500.

Advancing issues outnumbered declining ones on the NYSE by a 1.21-to-1 ratio; on Nasdaq, a 1.24-to-1 ratio favored decliners.

The S&P 500 posted 127 new 52-week highs and no new lows; the Nasdaq Composite recorded 207 new highs and 14 new lows.

Volume on U.S. exchanges was 7.3 billion shares, compared with an average of 7.0 billion shares over the last 20 trading days.

(Additional reporting by Sruthi Shankar and Susan Mathew in Bengaluru; Editing by Nick Zieminski and Diane Craft)

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